Atwood v. Western Const., Inc.

• Decision Date: 25 June 1996
• Docket Number: No. 21845,21845
• Citation: 129 Idaho 234,923 P.2d 479
• Parties: Darrell J. ATWOOD, Plaintiff-Appellant-Cross-Respondent, v. WESTERN CONSTRUCTION, INC., an Idaho Corporation, Defendant-Respondent-Cross-Appellant.
• Court: Idaho Court of Appeals

Page 479

923 P.2d 479

129 Idaho 234

Darrell J. ATWOOD, Plaintiff-Appellant-Cross-Respondent, v. WESTERN CONSTRUCTION, INC., an Idaho Corporation, Defendant-Respondent-Cross-Appellant.

No. 21845.

Court of Appeals of Idaho.

June 25, 1996.

Rehearing Denied Aug. 5, 1996.

Petition for Review Denied

Oct. 4, 1996.

Jim Jones & Associates, Boise, for appellant. Jim Jones argued.

Comstock & Bush, Boise, for respondent. John A. Bush argued.

LANSING, Judge.

Darrell J. Atwood appeals from a partial summary judgment dismissing claims for wrongful termination from employment and for breach of the implied covenant of good faith and fair dealing. He contends that the trial court erred in determining that Atwood was an employee terminable at will by his employer, Western Construction Inc. (Western), and in holding that Western was not obligated to make an additional contribution to Atwood's retirement account. Also at issue is whether the trial court erred in denying Western's request for attorney fees pursuant to Idaho Code Section 12-120(3). For the reasons stated below, we affirm the order of partial summary judgment but reverse the district court's denial of Western's request for an award of attorney fees.

I. BACKGROUND

Darrell J. Atwood was hired by the predecessor of Western in 1961, was promoted to equipment superintendent in 1981 and continued in that position until he was terminated from his employment with Western in 1991. According to Atwood, at the time of the termination he was told that the action was taken because Atwood had not informed his supervisor of the purpose of a three-day vacation taken in September 1991. The vacation consisted of a vendor-paid trip to a Caterpillar plant in Peoria, Illinois. Western later contended that Atwood was terminated for unsatisfactory performance which consisted of "bad mouthing" the owners, treating his subordinates harshly and failing to carry out his job responsibilities. Western acknowledges that Atwood was not warned about any of these concerns or counseled that his performance needed improvement prior to his discharge.

Following his termination, Atwood sued Western for wrongful discharge. Atwood alleged that there existed an express oral contract that Atwood's employment would continue until his retirement and, further, that Western's employee retention practices and general disciplinary procedures created an implied agreement limiting the reasons for which Atwood could be discharged. Atwood also alleged that his termination violated age discrimination laws and that Western violated the covenant of good faith and fair dealing by depriving Atwood of his final year's retirement account contribution.

The district court granted Western's motion for summary judgment on all of Atwood's causes of action except the age discrimination claim. At a subsequent trial, a jury returned a verdict in favor of Western on the cause of action for age discrimination. Atwood now appeals the district court's decision granting summary judgment on the claims for breach of contract and breach of the covenant of good faith and fair dealing. Western cross-appeals the district court's denial of its request for attorney fees pursuant to I.C. § 12-120(3).

II. ANALYSIS

A. Standard of Review

Summary judgment is appropriate only when genuine issues of material fact are absent and the case can be decided as a matter of law. I.R.C.P. 56(c); Whitlock v. Haney Seed Co., 110 Idaho 347, 715 P.2d 1017 (1986). The court must construe the record in the light most favorable to the party opposing the motion, drawing all reasonable inferences in that party's favor. Thompson v. Pike, 125 Idaho 897, 899, 876 P.2d 595, 597 (1994). If reasonable people could reach different conclusions or inferences from the evidence, the motion must be denied. Id. at 900, 876 P.2d at 598; Doe v. Durtschi, 110 Idaho 466, 470, 716 P.2d 1238, 1242 (1986). On appeal from an order granting summary judgment, we may freely review the pleadings, depositions, and admissions on file, together with any affidavits, to determine whether there is a genuine issue of any material fact. Farnsworth v. Dairymen's Creamery Ass'n, 125 Idaho 866, 876 P.2d 148 (Ct.App.1994).

B. Oral Contract

We first address Atwood's claim that the district court erred in granting summary judgment on his claim that there was an express oral contract for the continuation of his employment until he would choose to retire. The district court held that there was no prima facie showing of such a contract and that as a matter of law, Atwood was an employee at will.

It is the rule in Idaho, as in most states, that unless an employee is hired pursuant to a contract that specifies the duration of employment or limits the reasons for which an employee may be discharged, the employment is at the will of either party. In an employment-at-will relationship either party may, without incurring liability, terminate the employment at any time for any reason that does not violate public policy. Ray v. Nampa School Dist. No. 131, 120 Idaho 117, 120, 814 P.2d 17, 20 (1991); Metcalf v. Intermountain Gas Co., 116 Idaho 622, 624, 778 P.2d 744, 746 (1989); MacNeil v. Minidoka Memorial Hospital, 108 Idaho 588, 589, 701 P.2d 208, 209 (1985). However, the parties may agree to a contract term limiting the right of either to terminate the contract at will. Such a term may be express or implied. Metcalf, 116 Idaho at 624, 778 P.2d at 746.

Atwood's claim of an express oral agreement that his employment would continue until retirement is based upon a conversation that took place in the late 1980s between Atwood and Western's primary shareholder and president, Richard Heaton. At the time of that conversation, Atwood had been working for Western for over twenty-five years and had for some time been interested in acquiring an equity interest in the company. After learning that Heaton planned to transfer some of his stock to his sons, Atwood initiated a conversation in which he asked whether he could purchase stock in the company. Atwood, in deposition testimony, recalled the ensuing conversation as follows:

I asked Dick if I could buy interest in the company, the company Western Construction, and he said, no, it would be too much hassle, all the bookwork and this and that, and he says you've got a lot going into the pension plan and he said with what you got going in there you will have three or four hundred thousand dollars at the time you retire and that would be enough for you to live on, making me believe I was going to be there until I retired at retirement age.

In his affidavit in opposition to Western's motion for summary judgment, Atwood again described the conversation:

He told me that it would be too much of a hassle [to sell some shares in Western]; and that he was not willing to sell me any stock. I asked him what I could expect from Western Construction because I was concerned about whether I would be able to put away some assets for my retirement. Mr. Heaton told me that Western had a liberal pension policy, which I knew, and that it was designed to take care of people when they retire. He told me to stick with Western and I would have around $300,000 to $400,000 in my pension account when I retired.

Heaton gave a similar account of the conversation. Atwood characterizes this discussion as one in which he was promised continued employment with Western in exchange for his continued service until retirement. He asserts that, because this oral term modified his employment contract to provide for a specific duration of employment, he was no longer an employee-at-will, but could only be terminated for unsatisfactory performance.

The trial court concluded that Heaton's statement concerning the pension account value that Atwood could expect was not a promise of continued employment but, instead, simply a statement of fact--a projection of the amount that would accumulate in Atwood's account. We agree.

A contract is "a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty." RESTATEMENT (SECOND) OF CONTRACTS § 1 (1981). A promise is "a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made." Id., § 2. A distinction must be recognized between promises and mere statements of opinion or prediction. In making this distinction, the inquiry is whether a reasonable person in the position of the listener would conclude that the speaker had made a promise or only expressed an opinion, prediction or expectation. See RESTATEMENT (SECOND) OF CONTRACTS § 2, Comment f (1981); J. Perillo, CORBIN ON CONTRACTS, § 1.15 (1993). This is a factual issue and therefore ordinarily is to be determined by a jury. However, if the evidence relating to the alleged promise is not conflicting and admits of but one inference, the court may decide the issue as a matter of law. Watson v. Idaho Falls Consolidated Hospitals, Inc., 111 Idaho 44, 47, 720 P.2d 632, 635 (1986); Johnson v. Allied Stores Corp., 106 Idaho 363, 368, 679 P.2d 640, 645 (1984).

Thus, we must examine whether a reasonable person in Atwood's position would have concluded that Heaton promised Atwood lifetime employment with Western and that Atwood would only be discharged for cause. We agree with the district court's conclusion that the statement upon which Atwood relies in this case does not permit conflicting inferences and that reasonable minds could not reach different conclusions concerning the import of the statement. Given the language used and the context in which Heaton's statement was made, it can only be perceived as a prediction or opinion regarding Western's retirement plan. Heaton attempted to reassure Atwood about his retirement concerns by pointing out that the company retirement plan was a generous one and by estimating the amount that...